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India’s outsourcing giants are likely to face more delays in their frustrated bid to tap a potential IT services market worth $30 billion, after a report emerged suggesting the EU still has big data security concerns with the country.

The EU and India have been trying to finalise their Broad-based Trade and Investment Agreement since 2006, with the goal of breaking down trade barriers, but progress in the past few months has been slow, according to The Hindu.

One of New Delhi’s major requests as part of the deal is for the country to be recognised as a “data secure destination”, an accreditation which could increase the country’s outsourcing revenue from the EU from $20bn to $50bn, according to Nasscom’s Data Security Council of India.

Although the EU Justice Department’s study into India’s data protection regime has not yet been completed, mutterings suggest it has identified significant gaps in local laws which could require time-consuming legislative amendments.

“The recent communication from the EU Justice Department is worrying for us as it indicates that the EU is not willing to offer us data secure status till we make changes in our systems. This could take a long time as it may also require legislative changes,” a Commerce Department official told The Hindu.

“It is very clear that the EU is not in any hurry to give us data secure status. This would hamper the trade talks further.”

The thorough audit demanded by the EU would seem appropriate given the data breaches at Indian IT services firms periodically come to light.

For example, news broke a year ago that corrupt staff in local call centres were systematically selling on the personal details of millions of British customers.

It’s a problem which was highlighted in February by prime minister David Cameron, who during a trade visit to India signed a deal promising “an unprecedented level of co-operation with India on security issues”.

The joint task force which will be set up between the two countries will see the UK share its expertise in tackling data security with India in order to better secure the increasing amount of data stored on servers in the sub-continent. ®